How You Can Drive Business Growth During a Recession
Your Guide to Surviving the Toughest Economic Times
Uncertainty can make it difficult for any company to take risks and grow. In fact, most organizations do the opposite: they reduce expenses and try to cut costs where they can. Except, that’s not the best solution. You can only squeeze a lemon so dry, after all.
The solution to making sure you can survive whatever the market (or the world) throws your way is to rethink how you do business. With leaner systems, automated processes, and a new mindset toward cost reduction, you can make your business "recession-proof."
Traditional Ways of Budget Cutting Aren’t Enough
Most businesses rush to draw up a game plan for how to cut costs when the market shifts. But rushing to cut costs opens your company up to missed opportunities.
The first things to go are non-essential travel, unused subscriptions, and unnecessary services. Marketing, vehicle expenses, and staffing are other expenses that businesses quickly reduce to pad their cash flow right.
It's a start. But that’s not enough...
In fact, these types of measures often do more damage than good because they give businesses a false sense of cost reduction.
By overlooking how your business functions at a time like this, you risk burning through resources while remaining inefficient.
To come out on top, you need to rethink how your business functions. And with a few small, strategic enhancements, you can streamline your organization to thrive in uncertain times.
Think Darwin: If your business doesn’t quickly adapt to this new environment, it faces extinction. But with the right mindset, your company can evolve quickly.
5 Common Mistakes Businesses Make in a Recession
Aside from ineffective cost-cutting measures, businesses often make costly mistakes during recessions that slow growth. Worse, these mistakes can even cause the business to fail.
1. Continuing the Current Course
When the market pivots, your company needs to follow suit. If you continue with the way things are, your company will likely feel the consequences of not adapting at some point down the road. And by then, your business might be on a path to ruin it cannot avoid.
Even with a dire market outcome, acting irrationally or too quickly can often put you in a worse position than you were before or would have been had you stayed your current course. If you want your company to thrive in a bear market, you need a well-thought-out strategy based on changing industry and societal variables.
3. Overlooking Core Workflows
Companies tend to cut what they view as discretionary expenses first (marketing, for example). Meanwhile, they overlook how their business functions and the waste inherent in many inefficient processes. As a result, they save a few pennies when they could be saving dollars.
4. Shutting Down Lead Generation
Focusing on maintaining current relationships is a strategic move in a recession. But ignoring business opportunities during market shifts is a drastic mistake. You need to find new ways to expand lead generation into new avenues and maximize returns on your outreach.
5. Being Complacent
While market shifts happen, “hoping things will work out” or trying to “figure it out” as you go isn’t the right mindset. Make no mistake, business is always changing (whether the market is good or bad.) And if you think your business will just slip into a new groove without a real sound strategy, you’re in for a shock.
The Biggest Mistake Businesses Make During a Recession
Businesses looking to cut costs quickly often make a simple, but very foolish mistake. They cut the number one asset they can leverage to grow their business: their employees. Make no mistake, laying off personnel should be the VERY last thing you do if you want to come out on top during a recession.
To begin with, there are much better alternatives.
Furloughs, part-time work, temporary suspension of benefits, and unpaid time off can help reduce costs temporarily. With that buffer, your company gets the time it needs to find the REAL resource wasters in your business: unoptimized processes.
There’s a secret to coming out on top when the market takes a dive. You look inward at the business processes dragging your business down. Then, you create a plan to optimize them, reducing waste and inefficiencies.
Afterward, you lean on your employees to innovate and deliver high value to your customers, building up your company’s momentum again.
Once the market rebounds, you’ll have locked in ways to grow revenue while running leaner than ever before. Plus, you’ll still have your superstar staff with you. As a result, your company can make leaps and bounds when the market turns upward.
This cannot be overstated. Downsizing should be your last option. The cost of hiring employees, the psychological impact of cutting jobs, and the learning curve for new talent mean that you'll be playing catch up long after the market returns to normal.
Meanwhile, your competition will slip ahead while you're, stuck recruiting, training, and filtering out new hires. (Not to mention reactivating your marketing plan.)
Problems Facing Businesses During a Recession
Any time the market hints at a sign of recession, budgets tighten. People grow more cautious of their spending. Revenue stalls. Executives fail to hit their marks. And everyone turns to cost-cutting measures with the hopes that trimming back a few expenses will save them until the next boom.
The truth is that while you need to identify and eliminate waste, cost-cutting alone won't get your business through a recession. In fact, most businesses overly on it. As a result, they end up doing more damage.
Still, cost-cutting is important. And it should be your first point of action if you feel that your bottom line is at risk in the future. These are a few of the major budget drainers:
Lack of Support for Remote Work
Nowadays, more and more companies are embracing remote work. They've seen a positive impact with employees working from home. More productivity, fewer office expenses, better results.
Still, many businesses struggle to let go of traditional work cultures. They feel that employees perform better when they're in the office. This close-minded approach means that it's harder for them to adapt when external factors make going into the office impossible or unlikely.
Your staff spends “an estimated 28 percent of the workweek managing email and nearly 20 percent looking for internal information or tracking down colleagues who can help with specific tasks,” according to McKinsey. Needless back and forth, lost and missed communications, and trying to find physical documents make your employees drastically inefficient.
Bad data costs US businesses over 3 trillion each year. Many businesses don’t have their data centralized. This leads to duplicate or inaccurate data. It also creates the opportunity for costly data entry errors.
And these get expensive fast. Silos also make it impossible to have transparency throughout your business, leading to lost opportunities.
Your legacy systems hold you back. The amount of code and technical debt makes scaling them or adding new features cost-prohibitive. Often, these systems trap businesses, forcing them to restrict their future offerings around limited offerings.
Quickly, a system that was supposed to give your company the advantage turns into lead weights.
Strategies to Grow During an Economic Recession
When consumers lose confidence in the stability of their future, it reflects in their purchases. Businesses are no different. People will be cautious and careful, at least at first.
The key to increasing efficiency and growing during tough economic times is to turn your business into a recession-proof machine.
Use Readily Available Dashboards to Access Intelligent Data
Data is more vital than ever in a recession. You need up-to-date, accurate details on your customer, market, and vendors at all times. And you need it in real-time.
With that kind of transparency, you can make the strategic decisions necessary to deliver on your customer’s precise demands and evolve your business beyond your competition’s reach.
Embrace Effective Communication
Clear communication is vital, not only between departments but also across departments as well. You need to establish clear systems of communication that prevent redundancies, miscommunications and forgotten or lost tasks.
Develop Stable and Reasonable Processes for Business Continuity Your business needs to be agile. If one thing has been more apparent now than ever, it’s the need for your business to have the ability to sidestep unpredictable events.
That means embracing systems and processes that keep your business going while ensuring the safety of employees in ANY situation:
Video Conferencing: Teams achieve success through communication. Emails and chats only get you so far. You need an accessible way to keep the collaboration going at all levels without pause.
Cloud-Based Data: On-premise systems force your employees to be on-site. Without mobility, your business can easily be locked down by unpredictable events. Relying on the cloud means that your staff can access mission-critical information on the go.
Enforce Efficacy: Your team needs to feel empowered to take action. Any slowdowns during periods of uncertainty cause exponential drag. Your employees need access to the tools needed to complete tasks without barriers slowing them down.
Incorporate a Decision Matrix
You need a simple way to delegate decisions between the executive, management, and IC level. With a decision matrix, you can make that happen efficiently.
This increases your employee buy-in and accountability. However, it also allows your employees to finish more tasks without the fear of micromanagement.
How to Set Up a Successful Remote Workplace Culture
Now, more than ever, businesses are embracing remote work. But without a successful remote workplace culture, your systems will bog down employees, limiting their productivity while creating more problems.
Instead, you need to have the right systems in place to support your employees as they work remotely, so your business can succeed. No matter the situation.
Utilize Video Sharing
With travel restricted and social distancing in place, video conferencing will be crucial if you want to keep business moving along as smoothly as before.
With a stable platform for video conferencing, you can speak to new clients, teams, and employees and carry on business, no matter the situation.
Incorporate Communication Platforms
Plus, they’re easy to use. That’s key if you want to ensure employee adoption and secure communication.
Use Task Organizers and Project Management Tools
These systems allow for the creation of extensive to-do lists and tracking along with integrations to various platforms so that teams can monitor projects. And they have systems for notification and review that way employees don’t lose track of mission-critical tasks.
How Centralized Data in Your Business Provides the Advantage
The clear benefit to centralized data is that it allows your company to actually do something with it. Most companies collect vast amounts of data that sit in separate (ruinous) spreadsheets never to see the light of day.
But with a centralized system pooling data from your entire organization, you’ll have everything you need to reduce costs and find opportunities.
Here are the benefits of increasing transparency across your business with centralized data:
Optimize Existing Data
Data allows you to see what your customers expect and how you’re meeting those needs. When you centralize your data, you can sort through it more efficiently.
As a result, you get a clearer image of your organization allowing you to find weak points that you can improve.
From boosting customer satisfaction to investing in strategic initiatives, you’ll have better insight into choosing the best paths for your business on the roads ahead.
Make Faster, Better Decisions
With real-time data collected in a centralized system, you’ll have the most accurate and complete image of your organization. This will allow you to quickly act in situations where timing is crucial.
Avert disasters. Mitigate losses. Find strategic initiatives. You’ll have the power to act fast once you centralize your data.
Provide Simple, Actionable Reports
Rather than having to access multiple dashboards and create various reports that your team then needs to homogenize and sort through, if all your data is centralized, your reporting will be uniform and accessible.
This cuts down on miscommunication or errors in translating metrics from report to report, saving your business from potentially catastrophic mistakes.
Maintain Your Data Easier
Data is fluid in that it’s always changing. However, when you have customer information, for instance, stored in various systems, it can cause delays or inaccuracies. Sometimes these inaccuracies are minor.
Other times, they can cost you entire accounts. But with a centralized system of data, you’ll have the most accurate picture of your clients, customers, and prospects.
Enforce Consistency Across Your Business
The larger your organization is, the more variables you have to manage. When you add mobile or remote workers into the mix, the need to ensure consistency across your business becomes critical.
Whether enforcing standard procedures, practices, outcomes, everyone in your business needs to be on the same page.
Successful Integrations for Your Business
Every business needs multiple systems to meet customer demands. You have an ERP, CRM, AP software, Project management tools, and various communication platforms in your business.
And that’s just to name a view...
Each one of these systems has its own way of collecting data and passing information. The key to streamlining your business and reducing costs is to integrate as many of these systems as possible.
If you’re looking for the simplest way to connect all your business’s data systems, Quickbase Pipelines can help you. The platform provides intuitive automation between all of your company’s SaaS tools.
That means you can connect OneDrive, Gmail, Slack, and many more with a few simple clicks and virtually no knowledge of code.
As a low-code platform, your team can effortlessly design the specific pipelines they need to carry out their jobs more efficiently.
Quickbase’s visual interface helps your team build various pipelines that they can string together into multi-part workflows and have:
- Many tools and steps
- Use date/time conversions
You can also schedule pipelines to work at certain times or instances and transform your data all without having a Quickbase app in your various workflows. That’s true customization.
Workato’s Integration Automation for Business
Over 21,000 companies are already familiar with Workato and how this low-code iPaaS tool can help better connect their businesses. With intelligent automation and integration, Workato helps you work with your IT to design the business process optimization you need.
All while keeping your business secure and compliant.
**Connect over 200 business applications: **Jira, Salesforce, ServiceDesk, Hipchat, Confluence, and more with integrations from Workato. As an iPaaS, you can rapidly get the integrations you need on a budget and set them up in a fraction of the time. We’re talking days and hours, not months.
**The platform’s accessibility makes it an asset to businesses of any size. **Using automated workflows it calls “recipes”, Workato streamlines your workflow processes from initiation to completion.
You can break down how it works in 3 stages:
- Connect - You connect your business apps (On-premise or cloud-based).
- Trigger – You create the circumstances that trigger the automation.
- Actions – Once triggered, the automation carries the task from start to finish.
Why You Need to Automate Your Business Processes
Without automated processes, you’re wasting time running back and forth, trying to complete tasks that robots could do. Effortlessly. With many of the low code platforms out there, you can streamline your workflows, reducing the number of clicks and touchpoints necessary to complete a task.
And with the proper integrations in place, your business processes move across platforms easily.
Every business can benefit from business process automation. With automation in place, you can streamline and expedite entire departments in your organization. And because you’re breaking down data silos, you gain more transparency in your organization.
That allows you to stay proactive in how you manage your business:
- **Cut Costs: **With clearly mapped workflows, you can quickly replace inefficient systems with better solutions. You can also find and eliminate waste from shadow IT and maverick spending.
- Negotiate AP terms: With a clear view of your procurement vendors and their markets, you can track performance, take advantage of discounts, and even leverage other vendors for better deals that save your business money.
- Clear Employee Metrics: With all your employee data in one system, you can map out progress, set goals, and provide accurate evaluations for your staff. This will allow you to raise the bar and inspire your employees to grow.
- Identify Opportunities: There’s profit to be made in any market. Increase your long-term revenue by negotiating agreements based on current company needs.
The Upside to Market Downturns
Markets always recover. Again and again and again. No matter how tough the time, there's always a brighter end to the day ahead. The question is, where will your business be on the other side of this market shift?
If you play your cards right and use your time to position your business for future growth, you can come out of any sudden market swing, leaner and more efficient.
Grow Your Business in Any Market
You’re faced with a difficult decision. You need to cut waste and costs but work more efficiently than ever before. You need to extend your reach, not restrict it. Failing to do that will leave your company vulnerable.
And that’s all you need to miss opportunities and fall behind your competition. The key is to have a strategy in place that allows you to get ahead when the market shifts.
How do you make your business recession-proof, giving it the agility it needs to grow and quickly adapt to the market?
By working with tech consultants with a history of helping businesses redefine their workflows and processes.
See how we've helped our clients improve their businesses and get insane ROIs by checking out our case studies below.